EC Slaps Apple With £11bn Irish Tax Bill

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined
as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

An investigation found Apple had been able to avoid taxation on almost all profits generated in the EU single market thanks to a structure which routed revenues through two “paper” headquarters in Ireland and minimal tax rates in the country.

The EC says Apple only paid an effective corporate tax rate that fell from one percent in 2003 to 0.005 percent in 2014 – a rate which other companies in Ireland were not subjected to. This effectively amounted to state aid, the commission said.

Apple tax

“Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules,” said Commissioner Margrethe Vestager, who is in charge of competition policy. “The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.”

Apple is claimed to have received the illegal benefits since 1991, but investigators are only able to demand the Irish government recover up to ten years in unpaid taxes, dating back from the EC’s first request for information in 2013.

Apple told TechWeekEurope it would appeal the decision:

“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process,” said a spokesperson. “The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe.”

“Apple follows the law and pays all of the taxes we owe wherever we operate. We will appeal and we are confident the decision will be overturned.”

The Irish government has long welcomed Apple’s significant presence in the country, having opened its facility in Holyhill, County Cork in 1980. It plans to expand the campus to accommodate 1,000 new employees, bringing the total number up to 6,000.